LandBridge Company LLC(LB) - 2025 Q2 - Quarterly Results

Company Overview & Q2 2025 Highlights LandBridge achieved strong Q2 2025 financial performance, marked by significant revenue growth, record surface use royalties, strategic agreements, and a declared dividend Executive Summary LandBridge achieved strong Q2 2025 financial performance with 83% YoY and 8% QoQ revenue growth, a record $34.2 million in surface use royalties, and declared a $0.10 per share quarterly cash dividend - LandBridge's Q2 2025 revenue increased by 83% year-over-year and 8% quarter-over-quarter[1][5] - The company achieved a record $34.2 million in surface use royalties and revenue for the quarter[1] - A quarterly cash dividend of $0.10 per share was declared[1] Q2 2025 Financial Highlights | Metric | Amount | YoY Growth | QoQ Growth | | :--------------------- | :---------- | :--------- | :--------- | | Revenue | $47.5 million | 83% | 8% | | Net Income | $18.5 million | - | - | | Net Income Margin | 39% | - | - | | Adjusted EBITDA | $42.5 million | 81% | 9% | | Adjusted EBITDA Margin | 89% | - | - | | Operating Cash Flow | $37.3 million | - | - | | Free Cash Flow | $36.1 million | - | - | | Operating Cash Flow Margin | 79% | - | - | | Free Cash Flow Margin | 76% | - | - | CEO & CFO Commentary CEO Jason Long highlighted strong growth, deepened customer relationships, and enhanced asset value through differentiated pore space solutions, while CFO Scott McNeely noted high EBITDA and cash flow margins from the diversified, low-capex business model and ongoing revenue growth evaluations - CEO Jason Long stated that the company has achieved strong growth since its July 2024 IPO, deepened customer relationships, and increased its fee-based revenue portfolio[7] - LandBridge's differentiated pore space solutions enhance long-term asset value by enabling scalable, distributed water management solutions[7] - CFO Scott McNeely noted that the company is executing a highly diversified, low-capital expenditure business model, resulting in high EBITDA and cash flow margins[7] - The company is evaluating attractive opportunities to increase revenue from industrial uses[7] Recent Milestones LandBridge achieved key Q2 2025 milestones, including a 10-year agreement with Devon Energy, a CCGT power plant lease option, and a strategic partnership for scalable energy infrastructure - A 10-year surface use and pore space reservation agreement was signed with Devon Energy, granting Devon Energy 300,000 barrels per day of pore space capacity on East Stateline Ranch and Speed Ranch, with a commitment to deliver at least 175,000 barrels per day of produced water starting in Q2 2027[9] - A lease option agreement was signed with a leading independent power producer for the development, construction, and operation of a grid-connected natural gas combined cycle gas turbine (CCGT) power plant to serve potential co-located data center loads in the future[9] - A strategic partnership was established with a vertically integrated power generation and power solutions provider to accelerate the deployment of scalable energy infrastructure in West Texas, supporting energy-intensive customers including data centers[9] Second Quarter 2025 Financial Performance LandBridge reported robust Q2 2025 financial results with substantial revenue growth, net income, and high adjusted EBITDA margins, driven by diversified revenue streams Consolidated Financial Results LandBridge reported Q2 2025 total revenue of $47.5 million, an 83% YoY increase, with $18.5 million net income and an 89% adjusted EBITDA margin Q2 2025 Consolidated Financial Results | Metric (Millions USD) | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------- | :------------- | :------------- | :------------- | | Revenue | $47.5 | $44.0 | $26.0 | | Net Income | $18.5 | $15.5 | $(57.7) | | Net Income Margin | 39% | 35% | (222%) | | Adjusted EBITDA | $42.5 | $38.8 | $23.4 | | Adjusted EBITDA Margin | 89% | 88% | 90% | - Q2 2025 Adjusted EBITDA includes $9.0 million in non-cash expenses related to LandBridge Holdings LLC incentive units and $2.2 million in non-cash expenses related to restricted stock units[10] Diversified Revenue Streams Revenue streams are diversified, showing significant growth in surface use royalties, while resource sales and oil & gas royalties experienced QoQ declines - Surface use royalties and revenue increased by 31% quarter-over-quarter, primarily driven by a significant increase in easements and other surface-related revenue[11] - Resource sales and royalties decreased by 26% quarter-over-quarter, mainly due to reduced brackish water sales and royalty volumes[12] - Oil and gas royalties decreased by 19% quarter-over-quarter, primarily due to a reduction in net royalty production volume from 923 barrels of oil equivalent per day in Q1 2025 to 814 barrels of oil equivalent per day in Q2 2025[13] Surface Use Royalties and Revenue Surface Use Royalties and Revenue (Millions USD) | Category | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :------------- | :------------- | :------------- | | Surface Use Royalties and Revenue | $34.2 | $26.2 | $14.4 | - Quarter-over-quarter growth of 31% was primarily driven by an $8.7 million increase in easements and other surface-related revenue, benefiting from several large renewal payments, new projects with WaterBridge, Desert Environmental, and third parties, and an overall increase in land commercial activity[11] Resources Sales and Royalties Resources Sales and Royalties (Millions USD) | Category | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :------------- | :------------- | :------------- | | Resources Sales and Royalties | $10.6 | $14.4 | $7.0 | - Quarter-over-quarter decrease of 26% was primarily due to reduced brackish water sales and royalty volumes[12] Oil and Gas Royalties Oil and Gas Royalties (Millions USD) | Category | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :------------- | :------------- | :------------- | | Oil and Gas Royalties | $2.7 | $3.4 | $4.5 | - Quarter-over-quarter decrease of 19% was primarily due to a reduction in net royalty production volume from 923 barrels of oil equivalent per day in Q1 2025 to 814 barrels of oil equivalent per day in Q2 2025[13] Cash Flow, Liquidity & Capital Allocation LandBridge demonstrated strong Q2 2025 free cash flow generation, maintained ample liquidity, and declared a quarterly dividend, reflecting sound capital management Free Cash Flow Generation LandBridge demonstrated strong Q2 2025 free cash flow generation, with operating and free cash flow significantly increasing QoQ, and free cash flow margin improving from 36% to 76% Cash Flow Data (Millions USD) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :------------- | :------------- | :------------- | | Net Cash Provided by Operating Activities | $37.3 | $15.9 | $16.0 | | Free Cash Flow | $36.1 | $15.8 | $15.7 | | Free Cash Flow Margin | 76% | 36% | 60% | - Capital expenditures for Q2 2025 were $1.2 million, with net cash used in investing activities totaling $2.1 million[14] - Net cash used in financing activities for Q2 2025 included approximately $24.4 million in dividend and distribution payments and $5.0 million in debt repayments[15] Balance Sheet and Liquidity As of June 30, 2025, LandBridge maintained a strong balance sheet with $95.3 million total liquidity, including $20.3 million cash and $75.0 million available credit - As of June 30, 2025, total liquidity was $95.3 million[16] - As of June 30, 2025, the company had approximately $75.0 million in available borrowing capacity under its revolving credit facility[16] Liquidity and Debt (Millions USD) | Metric | June 30, 2025 | March 31, 2025 | | :--- | :------------- | :------------- | | Cash and Cash Equivalents | $20.3 | $14.9 | | Outstanding Borrowings (Term Loan and Revolving Credit) | $374.3 | $379.3 | Second Quarter 2025 Dividend LandBridge's Board declared a $0.10 per share quarterly dividend for Class A common stock and a corresponding cash distribution to DBR Land Holdings LLC unitholders - LandBridge's Board of Directors declared a dividend of $0.10 per share for Class A common stock[18] - The dividend will be paid on September 18, 2025, to shareholders of record as of September 4, 2025[18] Outlook LandBridge adjusted its FY2025 Adjusted EBITDA guidance due to deferred revenue recognition from a solar project, indicating a revised financial outlook Fiscal Year 2025 Outlook LandBridge adjusted its FY2025 Adjusted EBITDA guidance to $160 million to $180 million, primarily due to deferred DBR solar project revenue recognition - The company adjusted its FY2025 Adjusted EBITDA guidance to a range of $160 million to $180 million[19] - This adjustment is primarily due to the majority of DBR solar project revenue now expected to be recognized after this fiscal year[19] - The company is unable to provide a reconciliation of forward-looking non-GAAP financial measures to comparable GAAP measures due to the difficulty in estimating certain items[20] Corporate Information & Disclosures This section provides details on LandBridge's SEC filings, investor communication events, company background, and cautionary statements regarding forward-looking information Quarterly Report on Form 10-Q LandBridge filed its Form 10-Q quarterly report with the SEC on August 4, 2025, detailing financial statements for the period ended June 30, 2025 - The company's financial statements and related notes are available in its Form 10-Q quarterly report filed with the SEC on August 4, 2025, for the period ended June 30, 2025[22] Conference Call and Webcast Information A conference call to discuss Q2 results will be held on Thursday, August 7, 2025, at 8:00 AM CT, with a live webcast and audio replay available - The company will host a conference call on Thursday, August 7, 2025, at 8:00 AM CT to discuss Q2 results[23] - A live webcast will be available on the LandBridge investor relations website, with an audio replay available until August 21, 2025[23][24] About LandBridge LandBridge owns approximately 277,000 acres in the Permian Basin, actively managing land for energy, infrastructure, and digital development, formed by Five Point Infrastructure LLC - LandBridge owns approximately 277,000 acres of surface land, primarily located in the core of the Permian Basin's Delaware Sub-basin, one of the most active oil and gas exploration and development areas in the United States[25] - The company actively manages its land and resources to support and encourage energy and infrastructure development and other land uses, including digital infrastructure[25] - LandBridge was formed by Five Point Infrastructure LLC, which has a proven track record of investing in and developing energy, environmental water management, and sustainable infrastructure companies in the Permian Basin[25] Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements based on beliefs and assumptions, involving inherent risks and uncertainties, with actual results potentially differing materially from expectations - This press release may contain forward-looking statements based on LandBridge's beliefs, assumptions, and information currently available, which involve risks and uncertainties that are difficult to predict[26] - Investors should not place undue reliance on forward-looking statements, as actual results, performance, or achievements may differ materially from those contemplated in this press release due to various factors[27] - These and other risks related to LandBridge are more fully discussed in its filings with the SEC, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K[27] Unaudited Consolidated Financial Statements This section presents LandBridge's unaudited consolidated statements of operations, balance sheets, and cash flows for the specified periods, detailing financial performance and position Consolidated Statements of Operations The consolidated statements of operations detail LandBridge's revenue, expenses, and net income (loss) for Q2 2025 and 2024, showing a significant turnaround to profitability Consolidated Statements of Operations Summary (Thousands USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Total Revenue | $47,533 | $25,953 | $91,484 | $44,968 | | Operating Income (Loss) | $28,502 | $(51,236) | $53,539 | $(37,716) | | Operating Income (Loss) Before Taxes | $20,623 | $(57,516) | $37,683 | $(46,639) | | Net Income (Loss) | $18,475 | $(57,653) | $33,934 | $(46,877) | | Net Income Attributable to LandBridge Company LLC | $7,502 | N/A | $13,966 | N/A | Consolidated Balance Sheets The consolidated balance sheets show LandBridge's financial position as of June 30, 2025, and December 31, 2024, with increased assets and equity, and slightly reduced liabilities Consolidated Balance Sheets Summary (Thousands USD) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------- | :------------- | | Cash and Cash Equivalents | $20,345 | $37,032 | | Total Current Assets | $44,140 | $53,315 | | Total Non-Current Assets | $1,022,240 | $979,164 | | Total Assets | $1,066,380 | $1,032,479 | | Total Current Liabilities | $10,361 | $14,410 | | Total Non-Current Liabilities | $371,054 | $380,998 | | Total Liabilities | $381,415 | $395,408 | | Stockholders' Equity Attributable to LandBridge Company LLC | $266,448 | $211,776 | | Total Stockholders' Equity | $684,965 | $637,071 | Consolidated Statements of Cash Flows The consolidated statements of cash flows show positive operating cash flow, reduced investing outflows, and a shift in financing activities for the six months ended June 30, 2025 Consolidated Statements of Cash Flows Summary (Thousands USD) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------- | :------------------------- | | Net Cash Provided by Operating Activities | $53,245 | $33,258 | | Net Cash Used in Investing Activities | $(19,946) | $(430,968) | | Net Cash (Used in) Provided by Financing Activities | $(49,986) | $384,533 | | Net Decrease in Cash and Cash Equivalents | $(16,687) | $(13,177) | | Cash and Cash Equivalents at End of Period | $20,345 | $24,646 | Non-GAAP Financial Measures Reconciliation This section provides reconciliations of non-GAAP financial measures like Adjusted EBITDA and Free Cash Flow to their most directly comparable GAAP counterparts Overview of Non-GAAP Measures LandBridge utilizes Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, and Free Cash Flow Margin as supplementary non-GAAP metrics to assess performance, not as GAAP substitutes - Adjusted EBITDA and Adjusted EBITDA Margin are used to evaluate the financial performance of assets in generating sufficient cash to return to equity holders or repay debt[34] - Free Cash Flow and Free Cash Flow Margin are used to assess the company's ability to repay debt, return capital to shareholders, and fund potential acquisitions without relying on external financing[39] - These non-GAAP financial measures should not be considered in isolation or as a substitute for net income, gross margin, or any other measure under GAAP[33] Adjusted EBITDA Reconciliation This section provides a detailed table reconciling GAAP net income (loss) to Adjusted EBITDA and Adjusted EBITDA Margin for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024 Adjusted EBITDA Reconciliation (Thousands USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2024 | | :--------------------------------- | :------------------------- | :------------------------- | :------------------------- | | Net Income (Loss) | $18,475 | $15,459 | $(57,653) | | Depreciation, Depletion, Amortization, and Accretion | $2,545 | $2,601 | $2,112 | | Net Interest Expense | $7,879 | $7,977 | $6,280 | | Income Tax Expense | $2,148 | $1,601 | $137 | | EBITDA | $31,047 | $27,638 | $(49,124) | | Equity-Based Compensation - Incentive Units | $9,044 | $8,945 | $71,762 | | Equity-Based Compensation - Restricted Stock Units | $2,227 | $2,195 | - | | Transaction-Related Expenses | $135 | - | $774 | | Adjusted EBITDA | $42,453 | $38,778 | $23,412 | | Net Income (Loss) Margin | 39% | 35% | (222%) | | Adjusted EBITDA Margin | 89% | 88% | 90% | - Equity-based compensation for incentive units for the three months ended June 30, 2025, and March 31, 2025, includes only incentive units, while for the three months ended June 30, 2024, it includes only NDB incentive units[37] - Transaction-related expenses include non-capitalized transaction costs associated with completed or attempted acquisitions, debt amendments, and entity structuring[38] Free Cash Flow Reconciliation This section provides a detailed table reconciling GAAP operating cash flow to Free Cash Flow and Free Cash Flow Margin for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024 Free Cash Flow Reconciliation (Thousands USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2024 | | :----------------------------- | :------------------------- | :------------------------- | :------------------------- | | Net Cash Provided by Operating Activities | $37,332 | $15,913 | $16,043 | | Net Cash Used in Investing Activities | $(2,079) | $(17,867) | $(375,807) | | Net Cash Provided by (Used in) Operating and Investing Activities | $35,253 | $(1,954) | $(359,764) | | Acquisitions | $944 | $17,818 | $375,438 | | Proceeds from Asset Dispositions | $(105) | $(20) | - | | Free Cash Flow | $36,092 | $15,844 | $15,674 | | Operating Cash Flow Margin | 79% | 36% | 62% | | Free Cash Flow Margin | 76% | 36% | 60% | - Operating Cash Flow Margin is calculated by dividing net cash provided by operating activities by total revenue[42]